If you're a small business owner, you're no stranger to the highs and lows of growing your enterprise. But have you found yourself in a phase where growth has stalled, and every decision feels more like a survival tactic than a strategic move? Welcome to what I call the "stress zone" – a critical phase in your business's life cycle.
Identifying the Stress Zone in Your Business
The stress zone typically emerges after a period of initial growth. It's characterised by:
Management Overwhelm: You, the business owner, who once had a firm grip on operations, now feel stretched thin. Decision-making bottlenecks are common, and it seems like everything still requires your direct input. And whilst you may now have managers in place, the lack of a firm grip on all operations makes it feel even harder than before, as if you are constantly fighting fires.
Intense Market Competition: You're constantly battling on price in a saturated market. Differentiating your products or services becomes increasingly challenging.
Shift from Growth to Survival: Instead of exploring new opportunities, you find yourself focusing more on cutting costs. While necessary, this shift can sometimes blind you to long-term growth opportunities.
Although many companies fall into the stress zone, the paths they take to get there vary greatly. From the age of 20, I ran a label printing company for ten years, primarily in the niche market of franking labels for parcels. The issue when I took over was our heavy reliance on one company for most of the work, making us vulnerable. Additionally, the emergence of email signalled a decline in letters and parcels, coupled with our other business of labels for manufacturing companies, which were closing or moving operations abroad. I identified these threats and started exploring different markets. However, I was too slow and maintained too narrow a focus – common mistakes I see in many companies. Other reasons for entering the stress zone include reaching the limits of your current company structure or external forces like the pandemic. Often, it's a combination of factors, all necessitating change.
The Crucial Choices Ahead
In the stress zone, you're faced with a critical decision: adapt and find a sustainable way to operate at this level while planning for growth, or risk a gradual decline. This choice will define the future trajectory of your business.
Strategies to Thrive in the Stress Zone
Balance Cost-Cutting with Investment: Smart cost management is crucial, but don't let it overshadow the need for innovation and growth. Find and eliminate the wastes within your company and invest in areas that promise long-term returns, like technology, market research, or product development.
Avoid the Negative Mindset: Negativity breeds negativity, and this is not the mindset you want for your staff. When the weight of the company is on your shoulders, it's natural to want employees to understand the urgency, to work harder and smarter but don't become critical as this often has the opposite effect, and it's usually the best employees who leave first. Encouraging rather than rebuking will foster a more positive staff in general.
Open Your Mind to Learning New Strategies: There are many business models out there that can help you take a new view of your business. We all fall into patterns that we know, but taking the time to look at different ideas will open your mind up to a new way of thinking. Get help from professionals who study these models and can offer guidance. Looking at this can be overwhelming on your own. When I was running my first business, I would start and stop various strategies. A good professional will guide you through this and simplify the whole concept. One of the first things I do with my clients is to look at a Business Model Canvas, the model developed by Strategyzer (strategyzer.com). This is an excellent way to review your current business model and open your mind to other possibilities. I have designed a workshop that is great for getting 4-6 people in a company together, working through a series of exercises that really focus on this area.
A Business Plan is Not a Strategy: We are in an era of change, and a business plan is a static document. You need a model that is flexible, adaptable, and doesn't just sit in a drawer once it's been written. While business plans are right for some situations, they are not the tool for building your strategy.
Stand Out in the Crowd: In a crowded market, carving out a unique niche or offering exceptional customer experiences can set you apart. Ensure that when you're strategising, you consider how to distinguish yourself above the competition.
New Managers Are Not Always the Solution: I often see small businesses at this stage take on new management, hoping they'll provide the extra skills needed to navigate this period. Be cautious with this approach, especially if you haven't already established a strategy for moving forward. You need to have your strategy in place to ensure new managers align with your goals. It's a common problem for companies to hire managers in the hope they will bring a new strategy. Sometimes this works and they find the right person to steer them forward, but often it results in a mix of strategies between what the owner wants and what the new manager brings. As your business grows, you will need help; everyone does. I suggest working with someone outside of your organisation to discuss strategy and critique yours before bringing in new management. Impartial help is invaluable and it's much easier to stop working with an external consultant than to let go of an unsuitable employee.
Empower Your Team: Take a good look at your employees and their skills. Many companies overlook the talent within. People want to feel valued and will often take on extra work outside of their current role. Talk to your employees and really listen to them. Do they have additional skills you're not utilising? Often, once someone is in a role, we only see them for those skills. Also, compensate them appropriately for their skills, as a little extra each month could unlock a wealth of talent for your company. Again, a workshop can be an excellent way to empower your team. Hold a workshop around a specific challenge you're facing. This not only makes team members feel valued but is also a great way to uncover new ideas and better understand their capabilities. Additionally, ask staff members if there's anyone they feel really supports them in their job. This is a great way to identify who is going above and beyond in your team.
Final Thoughts
If you're in the stress zone, it's a sign that your business is at a pivotal point. How you navigate this phase will significantly impact your future success. Remember, the stress zone isn't just a challenge; it's an opportunity to reassess, realign, and reinvigorate your business strategy. Embrace it, learn from it, and use it as a stepping stone to your next business milestone.
"The Stockdale Paradox: 'You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.'"
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